Question: Question For a stock, you are given i) The current stock price is 70 11) The stock will pay dividend continuously at a rate proportional

Question For a stock, you are given i) The current stock price is 70 11) The stock will pay dividend continuously at a rate proportional to its price. The dividend yield is 2% i) The volatility of the stock is 25% iv) The continuously compounded risk-free interest rate is 5% Using a two-period forward tree, find the price of a 1-year at-the-money American call. Question For a stock, you are given i) The current stock price is 70 11) The stock will pay dividend continuously at a rate proportional to its price. The dividend yield is 2% i) The volatility of the stock is 25% iv) The continuously compounded risk-free interest rate is 5% Using a two-period forward tree, find the price of a 1-year at-the-money American call

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